EXECUTION COPY
TRUST AGREEMENT
between
TMS AUTO HOLDINGS, INC.
and
BANKERS TRUST (DELAWARE)
Owner Trustee
Dated as of November 30, 1996
Table of Contents
Page
ARTICLE I Definitions........................................... 1
Section 1.1. Capitalized Terms............................... 1
Section 1.2. Other Definitional Provisions................... 4
ARTICLE II Organization...................................... 5
Section 2.1. Name ........................................ 5
Section 2.2. Office.......................................... 5
Section 2.3. Purposes and Powers............................. 5
Section 2.4. Appointment of Owner Trustee.................... 6
Section 2.5. Initial Capital Contribution of
Trust Estate.................................. 6
Section 2.6. Declaration of Trust............................ 7
Section 2.7. Liability of Depositor as General
Partner ...................................... 7
Section 2.8. Title to Trust Property......................... 8
Section 2.9. Situs of Trust.................................. 8
Section 2.10. Representations and Warranties
of the Depositor.............................. 8
Section 2.11. Federal Income Tax Allocations.................. 10
Section 2.12. Covenants of the General Partner................ 11
Section 2.13. Covenants of the Owners......................... 12
ARTICLE III Trust Certificates and Transfer of
Interests....................................... 13
Section 3.1. Initial Ownership............................... 13
Section 3.2. The Trust Certificates.......................... 13
Section 3.3. Authentication of Trust Certificates............ 14
Section 3.4. Registration of Transfer and
Exchange of Trust Certificates................ 14
Section 3.5. Mutilated, Destroyed, Lost or
Stolen Trust Certificates..................... 15
Section 3.6. Persons Deemed Certificateholders............... 16
Section 3.7. Access to List of Certificate-
holders' Names and Addresses.................. 16
Section 3.8. Maintenance of Office or Agency................. 16
Section 3.9. Appointment of Certificate Paying Agent......... 17
Section 3.10. [Reserved]...................................... 17
Section 3.11. [Reserved]...................................... 17
Section 3.12. Disposition by the General Partner.............. 17
Section 3.13. ERISA Restrictions.............................. 18
Section 3.14. Book-Entry Trust Certificates................... 18
Section 3.15. Notices to Clearing Agency...................... 19
Section 3.16. Definitive Trust Certificates................... 19
ARTICLE IV Actions by Owner Trustee.......................... 20
Section 4.1. Prior Notice to Owners
with Respect to Certain Matters............... 20
Section 4.2. Action by Certificateholders with
Respect to Certain Matters.................... 21
Section 4.3. Action by Certificateholders with
Respect to Bankruptcy......................... 21
Section 4.4. Restrictions on Certificateholders'
Power......................................... 21
Section 4.5. Majority Control................................ 22
Section 4.6. Rights of Security Insurer...................... 22
ARTICLE V Application of Trust Funds:
Certain Duties.................................. 23
Section 5.1. Establishment of Certificate Distribution
Account....................................... 23
Section 5.2. Application of Funds in
Certificate Distribution Account.............. 23
Section 5.3. [Reserved]...................................... 26
Section 5.4. Method of Payment............................... 26
Section 5.5. No Segregation of Monies; No
Interest...................................... 26
Section 5.6. Accounting and Reports to the
Noteholders, Certificateholders,
the Internal Revenue Service and
Others........................................ 26
Section 5.7. Signature on Returns; Tax
Matters Partner............................... 27
ARTICLE VI Authority and Duties of Owner
Trustee....................................... 27
Section 6.1. General Authority............................... 27
Section 6.2. General Duties.................................. 28
Section 6.3. Action upon Instruction......................... 28
Section 6.4. No Duties Except as Specified in
this Agreement or in Instructions............. 29
Section 6.5. No Action Except under Specified
Documents or Instructions..................... 30
Section 6.6. Restrictions.................................... 30
ARTICLE VII Concerning the Owner Trustee.................... 30
Section 7.1. Acceptance of Trusts and Duties................ 30
Section 7.2. Furnishing of Documents........................ 32
Section 7.3. Representations and Warranties................. 32
Section 7.4. Reliance; Advice of Counsel.................... 32
Section 7.5. Not Acting in Individual Capacity.............. 33
Section 7.6. Owner Trustee Not Liable for
Trust Certificates or
Receivables.................................. 33
Section 7.7. Owner Trustee May Own Trust
Certificates and Notes....................... 34
Section 7.8. Payments from Owner Trust Estate............... 34
Section 7.9. Doing Business in Other Jurisdictions.......... 34
ARTICLE VIII Compensation of Owner Trustee.................. 35
Section 8.1. Owner Trustee's Fees and Expenses.............. 35
Section 8.2. Indemnification................................ 35
Section 8.3. Payments to the Owner Trustee.................. 35
Section 8.4. Non-recourse Obligations....................... 36
ARTICLE IX Termination of Trust Agreement................... 36
Section 9.1. Termination of Trust Agreement................. 36
Section 9.2. Dissolution upon Bankruptcy of the
General Partner ............................. 38
ARTICLE X Successor Owner Trustees and Additional
Owner Trustees................................. 38
Section 10.1. Eligibility Requirements for Owner
Trustee...................................... 38
Section 10.2. Resignation or Removal of Owner
Trustee...................................... 39
Section 10.3. Successor Owner Trustee........................ 40
Section 10.4. Merger or Consolidation of Owner
Trustee...................................... 40
Section 10.5. Appointment of Co-Trustee or
Separate Trustee............................. 40
ARTICLE XI Miscellaneous.................................... 42
Section 11.1. Supplements and Amendments..................... 42
Section 11.2. No Legal Title to Owner Trust
Estate in Certificateholders................. 44
Section 11.3. Limitations on Rights of Others................ 44
Section 11.4. Notices........................................ 44
Section 11.5. Severability................................... 45
Section 11.6. Separate Counterparts.......................... 45
Section 11.7. Third-Party Beneficiaries...................... 45
Section 11.8. [Reserved]..................................... 45
Section 11.9. No Petition.................................... 45
Section 00.00.Xx Recourse.................................... 46
Section 11.11.Headings....................................... 46
Section 11.12.GOVERNING LAW.................................. 46
Section 11.13.[Reserved]..................................... 46
Section 11.14.Servicer....................................... 46
EXHIBITS
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
TRUST AGREEMENT dated as of November
30, 1996 between TMS AUTO HOLDINGS, INC., a
Delaware corporation, and Bankers Trust
(Delaware), a Delaware banking corporation
as Owner Trustee.
ARTICLE I
Definitions
SECTION 1.1. Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Basic Documents" shall mean the Sale and Servicing Agreement, the
Indenture, the Certificate Depository Agreement, the Note Depository Agreement
and the other documents and certificates delivered in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.13.
"Book Entry Trust Certificates" means a beneficial interest in the
Trust Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.14.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be amended
from time to time.
"Certificate" means a Trust Certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A attached hereto.
"Certificate Depository Agreement" shall mean the agreement among the
Trust, the Owner Trustee, the Servicer and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the Trust
Certificates, substantially in the form attached hereto as Exhibit C, as the
same may be amended and supplemented from time to time.
"Certificate Distribution Account" shall have the meaning assigned to
such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 and shall initially be the Bankers Trust
Company.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, with a copy of all
notices and other documents to be also furnished to Bankers Trust Company, 0
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and Agency
Group, Structured Finance, 16th floor, or at such other address as the Owner
Trustee may designate by notice to the Certificateholders and the Depositor, or
the principal corporate trust office of any successor Owner Trustee (the address
of which the successor owner trustee will notify the Certificateholders and the
Depositor).
"Definitive Trust Certificates" shall mean either or both (as
the context requires) of (i) Trust Certificates issued in certificated, fully
registered form as provided in Section 3.14 and (ii) Trust Certificates issued
in certificated, fully registered form as provided in Section 3.16.
"Demand Note" shall have the meaning assigned to such term in Section
2.10(g).
"Depositor" shall mean the Seller in its capacity as Depositor
hereunder.
"ERISA" shall have the meaning assigned to such term in Section 3.13.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"General Partner" initially, the Depositor, or the successor permitted
by the Agreement.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Minimum Net Worth" means at any time of determination, and with
respect to the General Partner, net worth equal to 10% of the Certificate
Balance. For the purpose of the determination of Minimum Net Worth: (i) the
Demand Note issued to the General Partner shall be valued at par, (ii) assets
subject to a lien shall be valued at zero, (iii) Certificates or any other
interests in any entity taxable as a partnership for federal income tax purposes
shall be valued at zero, (iv) investments shall be valued at their respective
purchase prices plus accrued interest, and (v) demand notes of The Money Store
Inc. issued as contributions to the General Partner in connection with its
status as a general partner of any other partnership formed pursuant to trust
agreements substantially similar to this Agreement shall be valued at an amount
equal to the excess, if any, of (a) the aggregate current amount of all such
demand notes over (b) 10% of the aggregate Certificate Balance (as such terms
are defined in the related trust agreement) of all certificates issued by such
partnerships, as of such date of determination.
"Note Depository Agreement" shall mean the agreement among the Trust,
the Servicer and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Notes, as the same may be amended
or supplemented from time to time.
"Owner" shall mean each Person who is the beneficial owner of a Book
Entry Certificate as reflected in the records of the Clearing Agency or if a
Clearing Agency Participant is not the Owner, then as reflected in records of a
Person maintaining an account with such Clearing Agency (directly or indirectly,
in accordance with the rules of such Clearing Agency).
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement.
"Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Record Date" shall mean with respect to any Distribution Date, the
close of business on the last Business Day immediately preceding such
Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement among the Trust, the Representative, TMS Auto Holdings, Inc., The
Money Store Auto Finance Inc. and the Owner Trustee, dated as of November 30,
1996, as the same may be amended and supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Security Insurer" shall mean Financial Security Assurance Inc., or
its successor in interest.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
SECTION 1.2. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as "The
Money Store Auto Trust 1996-2", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and xxx and be sued.
SECTION 2.2. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and the
Depositor.
SECTION 2.3. Purposes and Powers. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and
the Trust Certificates pursuant to this Agreement, and to
sell the Notes and the Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to fund the Pre-Funding Account and the Capitalized
Interest Account and to pay the organizational, start-up and
transactional expenses of the Trust and to pay the balance to the
Depositor pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate (other than the Certificate Policy and the Certificate
Distribution Account) to the Indenture Collateral Agent pursuant to the
Indenture for the benefit of the Security Insurer and the Trustee on
behalf of the Noteholders and to hold, manage and distribute to the
Certificateholders and the Seller pursuant to the terms of the Sale and
Servicing Agreement any portion of the Trust Estate released from the
Lien of, and remitted to the Trust
pursuant to, the Indenture;
(iv) to enter into and perform its obligations under
the Basic Documents to which it is a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay organizational expenses of the Trust as they may arise.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owners, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall be treated as a partnership.
The parties agree that, unless otherwise required by appropriate tax
authorities, the Trust will file or cause to be filed annual or other necessary
returns, reports and other forms consistent with the characterization of the
Trust as a partnership for such tax purposes. Effective as of the date hereof,
the Owner Trustee shall have all rights, powers and duties set forth herein and
to the extent not inconsistent herewith, in the Business Trust Statute with
respect to accomplishing the purposes of the Trust. The Owner Trustee shall file
the Certificate of Trust with the Secretary of State.
SECTION 2.7. Liability of Depositor as General Partner. (a) The
General Partner shall pay organizational expenses of the Trust as they may arise
or shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee. The General Partner
shall also be liable directly to and will indemnify the injured party for all
losses, claims, damages, liabilities and expenses of the Trust (including
Expenses, to the extent not paid out of the Owner Trust Estate) to the extent
that the General Partner would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the General
Partner were a general partner; provided, however, that the General Partner
shall not be liable for any losses incurred by an Owner in the capacity of an
investor in the Trust Certificates or a Note Owner in the capacity of an
investor in the Notes. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the preceding
sentence for which the General Partner shall not be liable) shall be deemed
third party beneficiaries of this paragraph. The obligations of the General
Partner under this paragraph shall be evidenced by the Trust Certificates
described in Section 3.12, which for purposes of the Business Trust Statute
shall be deemed to be a separate class of Trust Certificates from all other
Trust Certificates issued by the Trust.
(b) No Owner, other than to the extent set forth in clause (a), shall
have any personal liability for any liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Owners shall not have legal title to any part of the Trust
Property. The Owners shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and IX. No transfer, by operation of law or otherwise, of any right, title or
interest by any Certificateholder of its ownership interest in the Owner Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.
SECTION 2.9. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. Payments will be received by the Trust only in Delaware or
New York and payments will be made by the Trust only from Delaware or New York.
The Trust shall not have any employees in any state other than Delaware;
provided however, that nothing herein shall restrict or prohibit the Owner
Trustee, in its individual capacity, the Servicer or any agent of the Trust from
having employees within or without the State of Delaware. The only office of the
Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Certificates and upon which the Security Insurer relies in issuing the Policies.
(a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a Delaware corporation with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted
and is proposed to be conducted pursuant to this Agreement and the
Basic Documents.
(b) Due Qualification. It is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance
of its obligations under this Agreement and the Basic Documents
requires such qualification.
(c) Power and Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and to carry out
its terms; the Depositor has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Trust and the Depositor has duly authorized such sale and assignment
and deposit to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Depositor by all necessary corporate action.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with
any governmental authority, bureau or agency is required in connection
with the execution, delivery or performance of this Agreement and the
Basic Documents, except for such as have been obtained, effected or
made.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the certificate of incorporation or by-laws of the
Depositor, or any material indenture, agreement or other instrument to
which the Depositor is a party or by which it is bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate
any law or, to the best of the Depositor's knowledge, any order, rule
or regulation applicable to the Depositor of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or
its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to its knowledge threatened
against it before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A)
asserting the invalidity of this Agreement or any of the Basic
Documents, (B) seeking to prevent the issuance of the Certificates or
the Notes or the consummation of any of the transactions contemplated
by this Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability
of, this Agreement or any of the Basic Documents, or (D) seeking to
adversely affect the federal income tax or other federal, state or
local tax attributes of the Certificates.
(g) Demand Note. It has been duly capitalized by the delivery
of a demand note (the "Demand Note") from the Representative in the
amount of $1,000,000 which Demand Note has not been canceled, waived or
terminated. The proceeds of such Demand Note have not been used and
will not be used to pay (i) any of the expenses of the Depositor in
connection with the transactions contemplated by the Basic Documents or
(ii) the purchase price for the Certificates purchased pursuant to
Section 2.3. Such Demand Note is enforceable against the Depositor,
subject to its terms, and subject to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization and similar laws now
or hereafter in effect relating to creditors' rights generally or the
rights of creditors of banks the deposit accounts of which are insured
by the Federal Deposit Insurance Corporation and subject to general
principles of equity (whether applied in a proceeding at law or in
equity).
SECTION 2.11. Federal Income Tax Allocations. Net income of the Trust
for any month as determined for Federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated:
(a) to the extent of available net income, among the
Certificateholders as of the first Record Date following the end of
such month, in proportion to their ownership of principal amount of
Trust Certificates on such date, an amount of net income up to the sum
of (i) the Certificate- holders' Monthly Interest Distributable Amount
for such month, (ii) interest on the excess, if any, of the
Certificateholders' Interest Distributable Amount for the preceding
Distribution Date over the amount in respect of interest at the
Certificate Rate that is actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, to the extent
permitted by law, at the Certificate Rate from such preceding
Distribution Date through the current Distribution Date, and (iii) the
portion of the market discount on the Receivables accrued during such
month that is allocable to the excess of the initial aggregate
principal amount of the Trust Certificates over their initial aggregate
issue price; and
(b) to the General Partner, to the extent of any
remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated to the General Partner to the
extent the General Partner is reasonably expected as determined by the Servicer
to bear the economic burden of such net losses, then net losses shall be
allocated among the Certificateholders as of the first Record Date following the
end of such month in proportion to their ownership of principal amount of Trust
Certificates on such Record Date until the principal balance of the Trust
Certificates is reduced to zero. The General Partner is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the General Partner, the Certificateholders, or as otherwise required by
the Code.
SECTION 2.12. Covenants of the General Partner. The General Partner
agrees and covenants for the benefit of each Owner, the Security Insurer and the
Owner Trustee, during the term of this Agreement, and to the fullest extent
permitted by applicable law, that:
(a) it shall not assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of the Demand Note held by it,
in whole or in part;
(b) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, the interest evidenced by
its certificates acquired pursuant to Section 3.12 without the consent of the
Security Insurer;
(c) other than pursuant to Section 2.7 or in connection with routine
administrative matters, it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of incorporation and the Basic Documents;
(d) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(e) it shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States;
(f) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action; and
(g) it shall not (i) assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of the Demand Note held by it,
in whole or in part, or (ii) make any distribution other than to the Trust or
unless the aggregate net worth of the General Partner following such
distribution shall be at least equal to the Minimum Net Worth unless the General
Partner shall deliver to the Owner Trustee, the Trustee and the Security Insurer
an Opinion of Counsel to the effect that the failure to maintain such Minimum
Net Worth shall not cause the Trust to be an association taxable as a
corporation or a publicly traded partnership.
SECTION 2.13. Covenants of the Owners. Each Owner by becoming a
beneficial owner of the Book-Entry Trust Certificate agrees:
(a) to be bound by the terms and conditions of the Certificates of
which such Owner is the beneficial owner and of this Agreement, including any
supplements or amendments hereto and to perform the obligations of an Owner as
set forth therein or herein, in all respects as if it were a signatory hereto.
This undertaking is made for the benefit of the Trust, the Owner Trustee, the
Security Insurer and all other Owners present and future;
(b) to hereby appoint the General Partner as such Owner's agent and
attorney-in-fact to sign any federal income tax information return filed on
behalf of the Trust and agree that, if requested by the Trust, it will sign such
federal income tax information return in its capacity as holder of an interest
in the Trust. Each Owner also hereby agrees that in its tax returns it will not
take any position inconsistent with those taken in any tax returns filed by the
Trust;
(c) if such Owner is other than an individual or other entity holding
its Certificate through a broker who reports securities sales on Form 1099-B, to
notify the Owner Trustee of any transfer by it of a Certificate in a taxable
sale or exchange, within 30 days of the date of the transfer; and
(d) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Trust or the General
Partner to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Trust Certificates, the Depositor shall be the sole beneficiary of the
Trust.
SECTION 3.2. The Trust Certificates. The Trust Certificates shall be
issued in denominations of $1,000 and integral multiples thereof; provided,
however, that Trust Certificates may be issued to the General Partner pursuant
to Section 3.12 in such denominations as to represent at least 1% of the initial
Certificate Balance. The Trust Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee. Trust Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates. A transferee of a Trust
Certificate shall become a Certificateholder, and shall be entitled to the
rights and subject to the obligations of a Certificateholder hereunder, upon due
registration of such Trust Certificate in such transferee's name pursuant to
Section 3.4.
SECTION 3.3. Authentication of Trust Certificates. Concurrently with
the initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president or any vice president, its treasurer or any assistant treasurer
without further corporate action by the Depositor, in authorized denominations.
No Trust Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Trust Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or Bankers Trust Company as
the Owner Trustee's authentication agent, by manual signature; such
authentication shall constitute conclusive evidence that such Trust Certificate
shall have been duly authenticated and delivered hereunder. All Trust
Certificates shall be dated the date of their authentication.
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. Bankers Trust
Company shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.8, the Owner Trustee
shall execute, authenticate and deliver (or shall cause Bankers Trust Company as
its authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Trust Certificates in
authorized denominations of a like class and aggregate face amount dated the
date of authentication by the Owner Trustee or any authenticating agent. At the
option of a Holder, Trust Certificates may be exchanged for other Trust
Certificates of the same class in authorized denominations of a like aggregate
amount upon surrender of the Trust Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Trust Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar, the Owner Trustee and
(unless an Insurer Default shall have occurred and be continuing) the Security
Insurer, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Trust Certificate shall
have been acquired by a bona fide purchaser, the Owner Trustee on behalf of the
Trust shall execute and the Owner Trustee, or Bankers Trust Company, as the
Owner Trustee's authenticating agent, shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Certificate, a new Trust Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Certificate under this Section,
the Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person by virtue
of becoming a Certificateholder or Owner in accordance with this Agreement shall
be deemed to be bound by the terms of this Agreement. Prior to due presentation
of a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and the Security Insurer and any agent of the Owner
Trustee, the Certificate Registrar and the Security Insurer, may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the Owner of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar or the
Security Insurer nor any agent of the Owner Trustee, the Certificate Registrar
or the Security Insurer shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Depositor or (unless an Insurer Default shall have occurred and be
continuing) the Security Insurer, within 15 days after receipt by the Owner
Trustee of a request therefor from such Person in writing, a list, of the names
and addresses of the Certificateholders as of the most recent Record Date. If
three or more Holders of Trust Certificates or one or more Holders of Trust
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Trust Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Trust Certificate, shall be deemed to have agreed not to
hold any of the Depositor, the Servicer the Owner Trustee or the Security
Insurer or any agent thereof accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Owner Trustee shall
maintain in New York, an office or offices or agency or agencies where Trust
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Owner Trustee in respect of the Trust
Certificates and the Basic Documents may be served. The Owner Trustee initially
designates Bankers Trust Company, 0 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
its principal corporate trust office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor, the Certificateholders and (unless
an Insurer Default shall have occurred and be continuing) the Security Insurer
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.9. Appointment of Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee. Any Certificate Paying Agent shall have
the revocable power to withdraw funds from the Certificate Distribution Account
for the purpose of making the distributions referred to above. The Owner Trustee
may revoke such power and remove the Certificate Paying Agent if the Owner
Trustee determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Agreement in any
material respect. The Certificate Paying Agent shall initially be Bankers Trust
Company, and any co-paying agent chosen by the Owner Trustee, and acceptable to
the Servicer. The Certificate Paying Agent shall be permitted to resign upon 30
days' written notice to the Owner Trustee and the Servicer. In the event that
the Owner Trustee shall no longer be the Certificate Paying Agent, the Owner
Trustee shall appoint a successor to act as Certificate Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such successor
Certificate Paying Agent or any additional Certificate Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee and (unless an
Insurer Default shall have occurred and be continuing) the Security Insurer an
instrument in which such successor Certificate Paying Agent or additional
Certificate Paying Agent shall agree with the Owner Trustee that as Certificate
Paying Agent, such successor Certificate Paying Agent or additional Certificate
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. The
Certificate Paying Agent shall return all unclaimed funds to the Owner Trustee
and upon removal of a Certificate Paying Agent such Certificate Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Owner Trustee
also in its role as Certificate Paying Agent, for so long as the Owner Trustee
shall act as Certificate Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 3.10. [Reserved]
SECTION 3.11. [Reserved]
SECTION 3.12. Disposition by the General Partner. On the Closing Date,
the Depositor shall purchase for adequate consideration and retain beneficial
and record ownership of Trust Certificates representing at least 1% of the
initial Certificate Balance, which Trust Certificates shall be issued in
definitive form. Any attempted transfer of any Trust Certificate that would
reduce such interest of the General Partner to below 1% of the Certificate
Balance shall be void; provided, however, that such Trust Certificate may be
transferred to a successor General Partner pursuant to Section 9.2. The Owner
Trustee shall cause any Trust Certificate issued to the General Partner to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER THE
LIMITED CONDITIONS SPECIFIED IN THE TRUST AGREEMENT".
SECTION 3.13. ERISA Restrictions. The Certificates may not be acquired
by or for the account of (i) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to the provisions of Title 1 of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1985, as
amended, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Holder thereof shall be deemed to have
represented and warranted that it is not a Benefit Plan.
SECTION 3.14. Book-Entry Trust Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates representing Book-Entry Trust Certificates, to
be delivered by or on behalf of the Trust to The Depository Trust Company, the
initial Clearing Agency; provided, however, that one Definitive Certificate (as
defined below) may be issued to the Depositor, as General Partner pursuant to
Section 3.12. Such Book-Entry Trust Certificate shall initially be registered on
the Certificate Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no beneficial owner (other than the General Partner) will
receive a Definitive Trust Certificate representing such beneficial owner's
interest in such Trust Certificate, except as provided in Section 3.16. Unless
and until Definitive Trust Certificates have been issued to beneficial owners
pursuant to Section 3.16:
(i) the provisions of this Section shall be in full
force and effect;
(ii) the Certificate Registrar and the Owner Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Agreement relating to the Book-Entry Trust Certificates (including the
payment of principal of and interest on the Book-Entry Trust
Certificates and the giving of instructions or directions to Owners of
Book- Entry Trust Certificates) as the sole Holder of Book-Entry Trust
Certificates and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control;
(iv) the rights of the Owners of the Book-Entry Trust Certificates
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Certificate Depository Agreement, unless and until
Definitive Trust Certificates are issued pursuant to Section 3.16, the
Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of
and interest on the Book-Entry Trust Certificates to such Clearing
Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Trust
Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Book-Entry Trust Certificates and has delivered such
instructions in writing to the Owner Trustee.
SECTION 3.15. Notices to Clearing Agency. Whenever a notice or other
communication to the Owners is required under this Agreement, unless and until
Definitive Trust Certificates shall have been issued to Owners pursuant to
Section 3.16, the Owner Trustee shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners, except to the General Partner.
SECTION 3.16. Definitive Trust Certificates. If (i) the Servicer
advises the Owner Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Trust Certificates, and the Servicer is unable to locate a qualified successor,
(ii) the Servicer at its option advises the Owner Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, Owners of Certificates representing
beneficial interests aggregating at least a majority of the Certificate Balance
advise the Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the
Owners of Trust Certificates, then the Clearing Agency shall notify all Owners
and the Owner Trustee of the occurrence of any such event and of the
availability of the Definitive Trust Certificates to Owners requesting the same.
Upon surrender to the Owner Trustee of the typewritten Trust Certificate or
Trust Certificates representing the Book Entry Trust Certificates by the
Clearing Agency, accompanied by registration instructions, the Owner Trustee
shall execute and authenticate the Definitive Trust Certificates in accordance
with the instructions of the Clearing Agency. Neither the Certificate Registrar
nor the Owner Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Trust Certificates, the Owner
Trustee shall recognize the Holders of the Definitive Trust Certificates as
Certificateholders. The Definitive Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Owner Trustee, as evidenced by its execution thereof.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1. Prior Notice to Owners with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action and
the Certificateholders shall not have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that such Certificateholders
have withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute or unless such amendment would not
materially and adversely affect the interests of the Owners);
(b) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is required;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is not required and such amendment materially
adversely affects the interest of the Certificateholders;
or
(d) except pursuant to Section 11.1(b) of the Sale and
Servicing Agreement, the amendment, change or modification of the Sale
and Servicing Agreement, except to cure any ambiguity or defect or to
amend or supplement any provision in a manner that would not materially
adversely affect the interests of the Certificateholders.
The Owner Trustee shall notify the Certificateholders in writing of any
appointment of a successor Note Registrar, Certificate Paying Agent or
Certificate Registrar within five Business Days
thereof.
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders or the Security Insurer in accordance with the Basic
Documents, to (a) remove the Servicer under the Sale and Servicing Agreement
pursuant to Section 8.1 thereof or (b) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Certificateholders and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to, and shall not, commence any
proceeding or other actions contemplated by Section 2.12(d) relating to the
Trust without the prior written consent of the Security Insurer (unless an
Insurer Default shall have occurred and be continuing) and the unanimous prior
approval of all Certificateholders and the delivery to the Owner Trustee by each
such Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document, unless the Certificateholders are the Instructing Party
pursuant to Section 6.3 and unless a Certificateholder previously shall have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless Certificateholders
evidencing not less than 25% of the Certificate Balance shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under this Agreement and shall have offered to the
Owner Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit,
or proceeding, and during such 30-day period no request or waiver inconsistent
with such written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 6.3; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
Nothing in this Agreement shall be construed as giving the Certificateholders
any right to make a claim under the Certificate Policy.
SECTION 4.5. Majority Control. No Certificate Owner shall have any
right to vote or in any manner otherwise control the operation and management of
the Trust except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of Trust Certificates evidencing not
less than a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Holders of Certificates evidencing not
less than a majority of the Certificate Balance at the time of the delivery of
such notice.
SECTION 4.6. Rights of Security Insurer. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the Servicer, (ii) initiate
any claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Receivable or any rights of the Trust thereunder, (iii)
authorize the merger or consolidation of the Trust with or into any other
business trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust.
ARTICLE V
Application of Trust Funds:
Certain Duties
SECTION 5.1. Establishment of Certificate Distribution Account. (a)
The Owner Trustee, for the benefit of the Certificateholders, shall establish
and maintain in the name of the Trust an Eligible Deposit Account (the
"Certificate Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Deposit Account, the Owner Trustee shall within
five Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency and, so long as no Insurer Default shall have occurred
and be continuing, the Security Insurer may consent) establish a new Certificate
Distribution Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be invested, by
the Owner Trustee at the Servicer's written direction, in Eligible Investments
that mature not later than one Business Day prior to the Distribution Date for
the Monthly Period to which such amounts relate. Investments in Eligible
Investments shall be made in the name of the Trust, and such investments shall
not be sold or disposed of prior to their maturity. Subject to the other
provisions hereof, the Owner Trustee shall have sole control over each such
investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the Owner
Trustee. All Investment Earnings on funds in the Certificate Distribution
Account shall be distributed on the next Distribution Date pursuant to Section
5.6 of the Sale and Servicing Agreement.
SECTION 5.2. Application of Funds in Certificate Distribution Account.
(a) On each Distribution Date, the Owner Trustee will, based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 4.9 of the Sale and Servicing Agreement, distribute to
Certificateholders, to the extent of the funds available, amounts deposited in
the Certificate Distribution Account pursuant to Sections 5.6(b) and 9.1 of the
Sale and Servicing Agreement on such Distribution Date in the following order of
priority:
(i) first, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 5.6(b)(v) or Section 9.1(b)(v)
of the Sale and Servicing Agreement, to the Certificateholders, on a
pro rata basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 5.6(b)(vi) or Section
9.1(b)(iv) of the Sale and Servicing Agreement, to the
Certificateholders, on a pro rata basis, an amount equal to the
Certificateholders' Principal
Distributable Amount.
(b) On the Distribution Date following the date on which amounts
received in respect of the Seller's or the Servicer's exercise of its option to
purchase the corpus of the Trust pursuant to Section 9.1(a) of the Sale and
Servicing Agreement are deposited in the Certificate Distribution Account, the
Owner Trustee will distribute such amounts taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata
basis, for amounts due and unpaid on the Certificates for
principal.
(c) On the Distribution Date on which Insolvency Proceeds are
deposited in the Certificate Distribution Account pursuant to Section 9.1(b) of
the Sale and Servicing Agreement (or on the Distribution Date immediately
following such deposit if such proceeds are not deposited in the Certificate
Distribution Account on a Distribution Date), the Owner Trustee will distribute
the Insolvency Proceeds so deposited in the Certificate Distribution Account
taking into account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata
basis, for amounts due and unpaid on the Certificates for
principal.
(d) On the Distribution Date following the date on which the Trustee
makes payments of money or property in respect of liquidation of the Trust
Property pursuant to Section 5.6 of the Indenture and deposits funds received in
connection with such liquidation in the Certificate Distribution Account, the
Owner Trustee will distribute such funds taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata
basis, for amounts due and unpaid on the Certificates for
principal; and
(e) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.8 of the Sale and Servicing Agreement on such Distribution
Date.
(f) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-US
Certificateholder), the Owner Trustee may in it sole discretion withhold such
amounts in accordance with this clause (f). In the event that an Owner wishes to
apply for a refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.
(g) Any funds remaining in the Certificate Distribution Account after
distribution of all amounts specified in this Section 5.2 shall be distributed
to the General Partner.
SECTION 5.3. [Reserved.]
SECTION 5.4. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if (i)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Distribution Date and such Holder's Trust Certificates in the aggregate evidence
a denomination of not less than $1,000,000 or (ii) such Certificateholder is the
General Partner, or an Affiliate thereof, or, if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register; provided, however, that, unless Definitive Trust Certificates have
been issued pursuant to Section 3.16, with respect to Trust Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of any
Trust Certificate (whether on the Final Scheduled Distribution Date or
otherwise) will be payable only upon presentation and surrender of such Trust
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.8.
SECTION 5.5. No Segregation of Monies; No Interest. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 5.6. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. Subject to Sections
10.1(b)(iii) and 10.1(c) of the Sale and Servicing Agreement, the General
Partner shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Certificateholder to prepare its Federal and state
income tax returns, (c) file or cause to be filed such tax returns relating to
the Trust (including a partnership information return, Form 1065), and direct
the Owner Trustee to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes and (d) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(c) with
respect to income or distributions to Certificateholders. The Owner Trustee
shall make all elections pursuant to this Section as directed by the General
Partner. The Owner Trustee shall sign all tax information returns filed pursuant
to this Section 5.6 and any other returns as may be required by law, and in
doing so shall rely entirely upon, and shall have no liability for information
provided by, or calculations provided by, the General Partner. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently any
market discount that accrues with respect to the Receivables. The Owner Trustee
shall not make the election provided under Section 754 of the Code.
SECTION 5.7. Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust the tax returns of the Trust, unless applicable law requires
a Certificateholder or an Owner to sign such documents, in which case such
documents shall be signed by the General Partner.
(b) The General Partner shall be the "tax matters partner" of the
Trust pursuant to the Code.
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Trustee to authenticate and deliver Class A-1
Notes in the aggregate principal amount of $59,600,000, Class X- 0 Notes in the
aggregate principal amount of $121,400,000 and Class A-3 Notes in the aggregate
principal amount of $67,000,000. In addition to the foregoing, the Owner Trustee
is authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further authorized
from time to time to take such action as the Instructing Party recommends with
respect to the Basic Documents so long as such activities are consistent with
the terms of the Basic Documents.
SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement and to
administer the Trust in the interest of the Owners, subject to the Basic
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Servicer to carry out its obligations under
the Sale and Servicing Agreement.
SECTION 6.3. Action upon Instruction. (a) Subject to Article IV, the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or the Class A Certificateholders (if an Insurer Default shall have
occurred and be continuing) (the "Instructing Party") shall have the exclusive
right to direct the actions of the Owner Trustee in the management of the Trust,
so long as such instructions are not inconsistent with the express terms set
forth herein or in any Basic Document. The Instructing Party shall not instruct
the Owner Trustee in a manner inconsistent with this Agreement or the Basic
Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Certificateholders received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificate holders, and shall have no liability to any Person for such action
or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee in its individual capacity also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms of the
Basic Documents and this Agreement. The Owner Trustee in its individual capacity
shall not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, bad faith or
negligence, (ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee, in its individual
capacity, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee, in its individual capacity. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Owner Trustee shall not be liable for any
error of judgment made by a Responsible Officer of the
Owner Trustee;
(b) the Owner Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
accordance with the instructions of the Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur
any financial liability in the performance of any of its rights or
powers hereunder or under any Basic Document if the Owner Trustee shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any
of the Basic Documents, including the principal of and
interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the Basic
Documents, other than the certificate of authentication on the Trust
Certificates, and the Owner Trustee shall in no event assume or incur
any liability, duty or obligation to the Security Insurer, Trustee,
Indenture Collateral Agent, the Collateral Agent, any Noteholder or to
any Certificateholder, other than as expressly provided for herein and
in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Security Insurer, the Trustee or the Servicer under
any of the Basic Documents or otherwise and the Owner Trustee shall
have no obligation or
liability to perform the obligations of the Trust under this Agreement
or the Basic Documents that are required to be performed by the
Security Insurer under the Certificate Policy, by the Trustee under the
Indenture or the Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Basic Document, at
the request, order or direction of any of the Certificateholders,
unless such Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any Basic Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for
other than its negligence, bad faith or willful misconduct in the
performance of any such act.
SECTION 7.2. Furnishing of Documents. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. Representations and Warranties. The Owner Trustee in its
individual capacity hereby represents and warrants to the Depositor, the Owners
and the Security Insurer (which shall have relied on such representations and
warranties in issuing the Policies), that:
(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware state law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.
SECTION 7.4. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Basic Document herein.
SECTION 7.5. Not Acting in Individual Capacity. Except as provided
herein or in any other Basic Document, in accepting the trusts hereby created
Bankers Trust (Delaware) acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
SECTION 7.6. Owner Trustee Not Liable for Trust Certificates or
Receivables. The recitals contained herein and in the Trust Certificates (other
than the signature and countersignature of the Owner Trustee on the Trust
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Trust Certificates (other than the signature and
countersignature of the Owner Trustee on the Trust Certificates) or the Notes,
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority of
any security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor or
the Servicer with any warranty or representation made under any Basic Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.7. Owner Trustee May Own Trust Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
SECTION 7.8. Payments from Owner Trust Estate. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Bankers Trust (Delaware), or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 7.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither Bankers Trust (Delaware) or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Bankers Trust (Delaware) (or any successor
thereto); or (iii) subject Bankers Trust (Delaware) (or any successor thereto)to
personal jurisdiction in any jurisdiction other than the State of Delaware for
causes of action arising from acts unrelated to the consummation of the
transactions by Bankers Trust (Delaware) (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Representative and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
General Partner for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder; provided, however, that the Owner Trustee shall only be entitled to
reimbursement for expenses hereunder to the extent such expenses (i) are fees of
outside counsel engaged by the Owner Trustee in respect of the performance of
its obligations hereunder, but up to a dollar amount not to exceed the amount
previously agreed to with the Representative or (ii) relate to the performance
of its obligations pursuant to Section 5.6 hereof.
SECTION 8.2. Indemnification. The General Partner shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the General Partner shall not
be liable for or required to indemnify the Owner Trustee from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1. The indemnities contained in this Section shall survive
the resignation or termination of the Owner Trustee or the termination of this
Agreement. In any event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the General Partner which approval
shall not be unreasonably withheld.
SECTION 8.3. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 8.4. Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Owner.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement. (a) This Agreement and
the Trust shall terminate and be of no further force or effect upon the latest
of (i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the
Related Documents, (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement and the payment to the
Security Insurer of all amounts payable or reimbursable to it pursuant to the
Sale and Servicing Agreement, or (iii) at the time provided in Section 9.2.;
provided, however, that in no event shall the trust created by this Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living on the date of this Agreement of Xxxx Xxxxxxx of the
Commonwealth of Massachusetts; and provided, further, that the rights to
indemnification under Section 8.2 shall survive the termination of the Trust.
The Servicer shall promptly notify the Owner Trustee and the Security Insurer of
any prospective termination pursuant to this Section 9.1. Except as provided in
Section 9.2, the bankruptcy, liquidation, dissolution, death or incapacity of
any Certificateholder or Owner, other than the General Partner as described in
Section 9.2, shall not (x) operate to terminate this Agreement or the Trust, nor
(y) entitle such Certificateholder's or Owner's legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in clause (a), neither the Depositor nor the
General Partner nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificate holders shall surrender their Trust
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 9.1(c) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final payment of the Trust Certificates shall be made upon presentation
and surrender of the Trust Certificates at the office of the Certificate Paying
Agent therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Trust Certificates at the office of the Certificate Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Certificate Paying Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Trust Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Owner Trustee to the General Partner. As soon as
practicable after the termination of the Trust, the Owner Trustee shall
surrender the Certificate Policy to the Security Insurer for cancellation.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the General Partner.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. Dissolution upon Bankruptcy of the General Partner. In
the event that an Insolvency Event shall occur with respect to the General
Partner, this Agreement shall be terminated in accordance with Section 9.1 90
days after the date of such Insolvency Event, unless, before the end of such
90-day period, the Owner Trustee shall have received written instructions from
Certificateholders holding a majority of the Certificate Balance (other than the
General Partner) to the effect that each such party disapproves of the
liquidation of the Receivables and termination of the Trust. Promptly after the
occurrence of any Insolvency Event with respect to the General Partner, (i) the
General Partner shall give the Trustee, the Owner Trustee and the Security
Insurer written notice of such Insolvency Event, (ii) the Owner Trustee shall,
upon the receipt of such written notice from the General Partner, give prompt
written notice to the Certificateholders and the Trustee of the occurrence of
such event and (iii) the Trustee shall, upon receipt of written notice of such
Insolvency Event from the Owner Trustee or the General Partner, give prompt
written notice to the Noteholders of the occurrence of such event; provided,
however, that any failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Trust pursuant to the
first sentence of this Section 9.2. Upon a termination pursuant to this Section,
the Security Insurer or, if an Insurer Default has occurred and is continuing,
the Owner Trustee shall direct the Trustee promptly to sell the assets of the
Owner Trust Estate (other than the Certificate Policy) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such a
sale of the assets of the Trust shall be treated as collections under the Sale
and Servicing Agreement and shall be distributed in accordance with Section
9.1(b) thereof.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Security Insurer in its sole discretion,
so long as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the General Partner, the Security Insurer
and the Servicer. Upon receiving such notice of resignation, the General Partner
shall promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Owner Trustee and one copy to the successor Owner Trustee, provided that the
General Partner shall have received written confirmation from each of the Rating
Agencies that the proposed appointment will not result in an increased capital
charge to the Security Insurer by either of the Rating Agencies. If no successor
Owner Trustee shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Owner
Trustee or the Security Insurer may petition any court of competent jurisdiction
for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the General Partner, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the General Partner with the consent of the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) may remove the Owner Trustee. If the General Partner shall remove
the Owner Trustee under the authority of the immediately preceding sentence, the
General Partner shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed, one copy to the Security Insurer and one copy
to the successor Owner Trustee and payment of all fees owed to the outgoing
Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The General Partner shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
General Partner, the Servicer, the Security Insurer and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
General Partner and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Trustee, the Noteholders and the Rating
Agencies. If the Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Security Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject, unless an
Insurer Default shall have occurred and be continuing, to the approval of the
Security Insurer (which approval shall not be unreasonably withheld) shall have
the power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining
in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1 Supplements and Amendments. (a) This Agreement may be
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Security Insurer (so long as an Insurer Default shall not have occurred
and be continuing) and with prior written notice to the Rating Agencies, without
the consent of any of the Noteholders or the Certificateholders, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing) by the Depositor and the Owner
Trustee, with prior written notice to the Rating Agencies, with the consent of
the Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes and, to the extent such amendment materially and adversely
affects the interests of the Noteholders, the consent of the Holders of
Certificates evidencing not less than a majority of the Certificate Balance
(which consent of any Holder of a Certificate or Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders of such Certificate or Note
and of any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Certificate or Note) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that, subject to the express rights of the Security Insurer
under the Basic Documents, no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Noteholders or the Certificateholders or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and Holders of all outstanding
Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholders to and in
their ownership interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. Limitations on Rights of Others. Except for Section 2.7,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders, the Servicer and, to the extent
expressly provided herein, the Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor,
addressed to TMS Auto Holdings, Inc., 0000 Xxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention: Executive Vice President; if to the
holder of the Security Insurer, addressed to Security Insurer, Financial
Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Surveillance Department, Telex No.: (000) 000-0000, Confirmation: (212)
826-0100, Telecopy Nos.: (000) 000-0000, (000) 000-0000 (in each case in which
notice or other communication to Financial Security refers to an Event of
Default, a claim on the Policies or with respect to which failure on the part of
Financial Security to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head-Financial Guaranty
Group "URGENT MATERIAL ENCLOSED"); or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder. Upon
issuance of the Certificate Policy, this Agreement shall also inure to the
benefit of the Security Insurer for so long as an Insurer Default shall not have
occurred and be continuing. Without limiting the generality of the foregoing,
all covenants and agreements in this Agreement which confer rights upon the
Security Insurer shall be for the benefit of and run directly to the Security
Insurer, and the Security Insurer shall be entitled to rely on and enforce such
covenants, subject, however, to the limitations on such rights provided in this
Agreement and the Basic Documents. The Security Insurer may disclaim any of its
rights and powers under this Agreement (but not its duties and obligations under
the Policies) upon delivery of a written notice to the Owner Trustee.
SECTION 11.8. [Reserved.]
SECTION 11.9. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that they will not at any time institute against the General Partner, or
join in any institution against the General Partner of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Notes, this Agreement or any of the Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Seller, the Servicer, the General Partner, the Owner
Trustee, the Trustee, the Security Insurer or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the Trust Certificates or
the Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. [Reserved].
SECTION 11.14. Servicer. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Trust's agent and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
BANKERS TRUST (DELAWARE),
Owner Trustee
By:/s/ M. Xxxx Xxxxxxx
------------------------
Name: M. Xxxx Xxxxxxx
Title: Assistant Secretary
TMS AUTO HOLDINGS, INC.,
Depositor
By: /s/ Xxxxxx Dear
------------------------
Name: Xxxxxx Dear
Title: Executive Vice President
EXHIBIT A
NUMBER $
R- CUSIP NO.
SEE REVERSE FOR CERTAIN DEFINITIONS
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS TRUST CERTIFICATE IS DISTRIBUTABLE IN
INSTALLMENTS AS SET FORTH IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL OF THIS TRUST CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.]
[THIS CERTIFICATE IS NOT TRANSFERABLE]1
____% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles, vans or light
duty trucks and sold to the Trust by TMS Auto Holdings, Inc.
(This Trust Certificate does not represent an interest in or obligation of TMS
Auto Holdings, Inc. or any of its Affiliates, except to the extent described
below.)
THIS CERTIFIES THAT is the registered owner of DOLLARS nonassessable,
fully-paid, beneficial ownership interest in certain distributions of The Money
Store Auto Trust 1996-2 (the "Trust") formed by TMS Auto Holdings, Inc., a (the
"Seller"). The Trust Certificates have a certificate Rate of ____% per annum.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
1 To be inserted on the Certificate to be held by the General
Partner.
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
BANKERS TRUST (DELAWARE) BANKERS TRUST (DELAWARE)
not in its individual not in its individual
capacity but solely as capacity but solely as
Owner Trustee or Owner Trustee
By BANKERS TRUST COMPANY,
Authenticating Agent
by__________________________
by________________________
The Trust was created pursuant to a Trust Agreement dated as of
November 30, 1996 (the "Trust Agreement"), between the Seller and Bankers Trust
(Delaware), as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized Trust Certificates
designated as "____% Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under the Indenture dated as of November 30, 1996,
among the Trust, The Chase Manhattan Bank, as trustee and indenture collateral
agent, are three classes of Notes designated as "Class A-1 __% Asset Backed
Notes" (the "Class A-l Notes"), "Class A-2 Floating Rate Asset Backed Notes (the
"Class A-2 Notes"), "Class A-3 ____% Asset Backed Notes" (the "Class A-3 Notes",
together with the Class A-2 Notes and the Class A-1 Notes, (the "Notes"). This
Trust Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Trust Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a pool of retail installment
sale contracts secured by new and used automobiles, vans or light duty trucks
(the "Receivables"), all monies received thereunder on or after Initial Cutoff
Date, security interests in the vehicles financed thereby, certain bank accounts
and the proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement, all right, to the and interest of the Seller in and to the Purchase
Agreement dated as of November 30, 1996 between The Money Store Auto Finance
Inc. and the Seller and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the 20th day
of each month or, if such 20th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing in January 1997, to the Person in whose
name this Trust Certificate is registered at the close of business on the
Business Day preceding such Distribution Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date. No principal will
be paid on the Trust Certificate until the Class A-3 Notes have been paid in
full.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
The Certificates are entitled to the benefits of a financial guaranty
insurance policy (the "Certificate Policy") issued by Financial Security
Assurance Inc. (the "Security Insurer"), pursuant to which the Security Insurer
has unconditionally guaranteed payment of the Certificateholders' Interest
Distributable Amount and the Certificateholders' Principal Distributable Amount,
on each Distribution Date, all and to the extent as more fully set forth in the
Sale and Servicing Agreement.
It is the intent of the Seller, Servicer, holder of the General
Partner and Certificateholders that, for purposes of Federal income taxes, the
Trust will be treated as a partnership and the Certificateholders (including the
General Partner) will be treated as partners in that partnership. The General
Partner and the other Certificateholders by acceptance of a Trust Certificate,
agree to treat, and to take no action inconsistent with the treatment of, the
Trust Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the General Partner, or join in any institution against the General
Partner of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Trust Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Trust Certificate will be made after due notice by
the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office or agency
maintained for the purpose by the Owner Trustee in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
THE MONEY STORE AUTO TRUST 1996-2
By: BANKERS TRUST (DELAWARE)
not in its individual
capacity but solely as
Owner Trustee
Dated: By: ________________________
(Reverse of Trust Certificate)
The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the General Partner, the Owner Trustee or
any Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Trust Agreement, the Indenture or the Basic Documents. In addition, this
Trust Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Receivables and payments under the Certificate Policy, all as
more specifically set forth herein and in the Sale and Servicing Agreement. The
Trust Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Sale and Servicing Agreement. A copy of each of the Sale and Servicing Agreement
and the Trust Agreement may be examined during normal business hours at the
principal office of the Seller, and at such other places, if any, designated by
the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the holders of the
Notes and the Trust Certificates evidencing not less than a majority of the
outstanding Notes and the Certificate Balance. Any such consent by the holder of
this Trust Certificate shall be conclusive and binding on such holder and on all
future holders of this Trust Certificate and of any Trust Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Trust Certificates in authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is Bankers Trust
Company.
Except for Trust Certificates issued to the Depositor and transferred
the General Partner, the Trust Certificates are issuable only as registered
Trust Certificates without coupons in denominations of $1,000 or integral
multiples thereof; except as otherwise provided in the Trust Agreement. As
provided in the Trust Agreement and subject to certain limitations therein set
forth, Trust Certificates are exchangeable for new Trust Certificates in
authorized denominations evidencing the same aggregate denomination, as
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar, the Security Insurer and
any agent of the Owner Trustee, the Certificate Registrar or the Security
Insurer may treat the person in whose name this Trust Certificate is registered
as the owner hereof for all purposes, and none of the Owner Trustee, the
Certificate Registrar, the Security Insurer nor any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. The Servicer of the Receivables may at its
option purchase the corpus of the Trust at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property of
the Trust will effect early retirement of the Trust Certificates; however, such
right of purchase is exercisable, subject to certain restrictions, only as of
the last day of any Monthly Period as of which the Pool Balance is 10% or less
of the Original Pool Balance.
The Trust Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title 1 of ERISA, (b) a plan described in Section 4975(e) (l) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Trust Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Depositor, the General Partner or the Servicer, as the case may be, and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip
code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________________________________ Attorney to transfer said Trust
Certificate on the books of the Trust Certificate Registrar, with full power of
substitution in the premises.
Dated:
*
Signature Guaranteed:
*
--------------------------
* NOTICE: The signature to this assignment must correspond
with the name of the registered owner as it appears on the
face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
THE MONEY STORE AUTO TRUST 1996-2
THIS Certificate of Trust of The Money Store Auto Trust 1996-2 (the
"Trust"), dated as of __________ __, 199__, is being duly executed and filed by
__________________________ , a ________________ and ________________________, an
individual, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, ' 3801 et seq.).
1. Name. The name of the business trust formed hereby is The Money
Store Auto Trust 1996-2.
2. This Certificate of Trust will be effective __, 199 .
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as
owner trustee of the Trust.
By:________________________________
Name:
Title:
